EXHIBIT 10.90.11
GMAC COMMERCIAL FINANCE LLC
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
October 28, 2003
TARRANT APPAREL GROUP
TAG MEX, INC.
FASHION RESOURCE (TCL), INC.
UNITED APPAREL VENTURES, LLC
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Re: Amendment to Credit Agreement
Gentlemen:
Reference is made to the Revolving Credit, Factoring and Security
Agreement, dated as of January 21, 2000, by and among Tarrant Apparel Group
("Tarrant"), Tag Mex, Inc. ("Tag"), Fashion Resource (TCL), Inc. ("Fashion"),
United Apparel Ventures, LLC ("United"; and together with Tarrant, Tag and
Fashion, each, individually, a "Borrower" and collectively, the "Borrowers") and
GMAC Commercial Finance LLC, as successor by merger with GMAC Commercial Credit
LLC, as agent (as a lender and as successor in interest to Finova Capital
Corporation and Sanwa Bank California, the "Agent"), and the Lenders from time
to time parties thereto (as heretofore amended, and as the same now exists or
may hereafter be amended, restated, renewed, replaced, substituted,
supplemented, extended, or otherwise modified, the "Credit Agreement").
Borrowers have requested that Agent make certain amendments to the
Credit Agreement and Agent has agreed to do so, subject to the terms and
provisions set forth herein, all as more particularly set forth below.
1. DEFINITIONS. All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Effective as of the date
hereof, the Credit Agreement is hereby amended as follows:
(a) The definition of "Tangible Net Worth" as set forth
in Section 1.2 of the Credit Agreement is hereby amended by adding the following
at the end thereof:
"Notwithstanding anything to the contrary contained
herein, for purposes of calculating Borrowers'
Tangible Net Worth for the
fiscal quarters ending September 30, 2003 and
December 31, 2003, the value of Borrowers' assets
located in Mexico shall be calculated using a fixed
exchange rate for the Mexican Peso of 10.4176."
(b) Section 7.5 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"7.5 Financial Covenants. Borrowers shall maintain on a
consolidated basis:
(a) Commencing with the Borrowers' fiscal quarter ending
June 30, 2003, and as at the last day of each fiscal quarter
thereafter, maintain at all times a Tangible Net Worth in an
amount not less than the minimum amounts set forth below in
respect to the corresponding dates noted below:
Date Tangible Net Worth
---- ------------------
June 30, 2003 $75,000,000
September 30, 2003 $65,000,000
December 31, 2003 $65,000,000
(b) Commencing with the Borrowers' fiscal quarter ending
June 30, 2003, and as at the last day of each fiscal quarter
thereafter, maintain at all times a Fixed Charge Coverage in a
ratio of not less than the minimum ratios set forth below in
respect to the corresponding dates noted below.
Minimum Fixed
Date Charge Coverage
---- ---------------
June 30, 2003 0.70 to 1.0
September 30, 2003 0.75 to 1.0
December 31, 2003 0.74 to 1.0
(c) [INTENTIONALLY OMITTED]
(d) Commencing with the Borrower's fiscal quarter ending
June 30, 2003, and as at the last day of each fiscal quarter
thereafter, maintain at all times a Total Leverage Ratio in a
ratio of not greater than the maximum ratios set forth below
in respect to the corresponding dates noted below:
Date Total Leverage Ratio
---- --------------------
June 30, 2003 2.50 to 1.0
September 30, 2003 3.00 to 1.0
December 31, 2003 2.55 to 1.0"
3. FINANCIAL COVENANTS. Each of the Borrowers hereby agrees to
provide Agent with such financial information and reports so as to permit Agent
and Borrowers to establish the financial covenants set forth in Section 7.5 and
Section 8.6 of the Credit Agreement for periods subsequent to December 31, 2003
on mutually agreeable terms on or before December 31, 2003. In the event that
the financial covenants are not timely established on terms acceptable to Agent
in its sole discretion on or prior to December 31, 2003, such failure shall be
deemed to be an Event of Default under the Credit Agreement and the Other
Documents.
4. AMENDMENT FEE. In consideration of the amendments set forth
herein, Borrowers acknowledge, confirm and agree that Agent may charge and
Borrowers shall pay an amendment fee in the amount of One Hundred Thousand
($100,000) Dollars, which amendment fee shall be fully earned as of the date
hereof, shall not be subject to refund, rebate or proration for any reason
whatsoever, and may be charged by Agent to Borrowers as of the date hereof.
5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
amendment and the agreement of Agent to the modifications and amendments set
forth in this amendment are subject to the fulfillment of the following
conditions precedent:
(a) Agent shall have received all fees and other amounts due
and payable to Agent upon or prior to the effectiveness of this amendment;
(b) Each of the representations and warranties made by
Borrowers in the Credit Agreement shall be true and correct in all material
respects on and as of the date of this amendment; and
(c) No Event of Default shall have occurred and be continuing
on the date of this amendment, or would exist after giving effect to the
transactions contemplated under this amendment.
6. RELEASE. In consideration of this agreement and the
performance thereof and other good and valuable consideration, each Borrower
forever releases and discharges Agent, its affiliates, officers, directors,
consultants, agents, and employees, and their respective successors and assigns
(collectively the "Released Parties") from any and all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extent, executions, claims and
demands whatsoever, in law, admiralty or equity, without defense, offset or
counterclaim, which any Borrower, directly or indirectly, ever had or now or
can, shall or may, have against
any of the Released Parties for, upon, or by reason of any matter, cause or
thing whatsoever. Each Borrower expressly and explicitly acknowledges that it is
aware of and is knowingly waiving any rights that he, she, or it may have
against the Released Parties under the provisions of California Civil Code
Section 1542 (and any similar principle of law under any other applicable
jurisdiction), which section reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
In addition to the foregoing, each of the Borrowers agrees to forever refrain
and forbear from commencing, assisting, instituting, prosecuting or encouraging
others to institute or prosecute any litigation, action, arbitration,
administrative or other proceeding of any kind against any of the Released
Parties directly or indirectly arising out of, resulting from or relating in any
way to the subject matter of or the fact and course of conduct underlying the
releases granted herein.
7. NO OTHER MODIFICATIONS. Except as specifically set forth
herein, no other amendments, changes or modifications to the Credit Agreement or
the Other Documents are intended or implied, and, in all other respects, the
Credit Agreement and the Other Documents shall continue to remain in full force
and effect in accordance with their terms as of the date hereof. Except as
specifically set forth herein, nothing contained herein shall evidence a waiver
or amendment by the Agent of any other provision of the Credit Agreement or the
Other Documents nor shall anything contained herein be construed as a consent by
the Agent to any transaction other than those specifically consented to herein.
8. NO THIRD PARTY BENEFICIARIES. The terms and provisions of this
amendment shall be for the benefit of the parties hereto and their respective
successors and assigns; no other person, firm, entity or corporation shall have
any right, benefit or interest under this amendment.
9. COUNTERPARTS. This amendment may be signed in counterparts,
each of which shall be an original and all of which taken together constitute
one amendment. In making proof of this amendment, it shall not be necessary to
produce or account for more than one counterpart signed by the party to be
charged. This amendment may be executed and delivered via telecopier with the
same force and effect as if it were a manually executed and delivered
counterpart.
10. MERGER. This amendment sets forth the entire agreement and
understanding of the parties with respect to the matters set forth herein. This
amendment cannot be changed, modified, amended or terminated except in a writing
executed by the party to be charged.
11. GOVERNING LAW. The rights and obligations hereunder of each of
the parties hereto shall be governed by and interpreted and determined in
accordance with the laws of the State of New York, but excluding any principles
of conflicts of law or other rule of law that would result in the application of
the law of any jurisdiction other than the laws of the State of New York.
Very truly yours,
GMAC COMMERCIAL FINANCE LLC,
as Agent
By: /s/ Illegible
------------------------
Title: Sr. Vice President
ACKNOWLEDGED AND AGREED:
TARRANT APPAREL GROUP
By: /s/ Xxxxxxx Xxxx
-----------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
TAG MEX, INC.
By: /s/ Xxxxxxx Xxxx
-----------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
FASHION RESOURCE (TCL), INC.
By: /s/ Xxxxxxx Xxxx
-----------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
UNITED APPAREL VENTURES, LLC
By: /s/ Xxxxxxx Xxxx
-----------------------
Xxxxxxx Xxxx
Title: Manager
